A in San Francisco, California, US, on Thursday Aug. 10, 2023.
David Paul Morris | Bloomberg | Getty Images
General Motors will no longer fund its Cruise division’s robotaxi development, the company said on Tuesday.
The Detroit automaker cited the increasingly competitive robotaxi market, capital allocation priorities and the considerable time and resources necessary to grow the business as reasons for its decision.
“Cruise was well on its way to a robotaxi business — but when you look at the fact you’re deploying a fleet, there’s a whole operations piece of doing that,” GM CEO Mary Barra said on a call Tuesday.
GM plans to instead “realign its autonomous driving strategy” to focus on advanced driver assistance systems and autonomous systems for use in personal vehicles.
The company will combine the majority-owned Cruise LLC with GM technical teams. Barra, who also serves as board chair of Cruise, said the companies have yet to determine how many employees will move to GM. Cruise has nearly 2,300 employees, a GM spokesperson told CNBC.
The automaker currently owns about 90% of Cruise and has agreements with other shareholders that will raise its ownership to more than 97%, GM said in a statement. GM anticipates it will complete acquisition of remaining Cruise shares from outside shareholders by early 2025, CFO Paul Jacobson said Tuesday.
GM’s current annual expenditure on Cruise amounted to about $2 billion, and the restructuring would cut that by more than half, Jacobson said.
With Tuesday’s decision, GM is effectively pulling out of the robotaxi market despite the automaker having already spent more than $10 billion on Cruise since acquiring the company in 2016.
Honda, an outside investor in Cruise, told CNBC that it had planned to launch a driverless ride-hail service in Japan in early 2026, but will now re-assess those plans and make adjustments if needed.
“Honda remains committed to various research and development initiatives aimed at providing new mobility solutions to our customers in Japan,” a Honda spokesperson said on Tuesday.
An early entrant in the U.S. robotaxi market, Cruise faltered and grounded its driverless operations in October 2023. The decision to halt its emerging robotaxi service came after collisions, a clash with regulators and the suspension of permits that allowed it to operate a robotaxi ride hailing service in California.
GM in July announced that it would indefinitely delay production of the Origin autonomous vehicle as its Cruise self-driving unit attempted to relaunch operations. At that point, Cruise began to focus on using the next-generation Chevrolet Bolt for development of its autonomous vehicles.
As Cruise’s operations were on hold, its robotaxi rivals gained ground.
Alphabet-owned Waymo has begun to operate commercial robotaxi services across several major U.S. metro areas, with the company last week announcing its plans to expand into Miami. Chinese autonomous vehicle makers including Pony.ai and WeRide have rolled out in overseas markets as well.
Tesla, meanwhile, showed off design concepts for a self-driving Cybercab at an event in October. Tesla still classifies the Autopilot and Full Self-Driving software in its vehicles as “partially automated driving systems,” which require a human to be ready to steer or brake at all times. In an October earnings call, Tesla CEO Elon Musk said the company will launch a self-driving ride-hailing service in California and Texas as early as 2025.
SoftBank-funded Wayve is testing its autonomous vehicles in San Francisco, and Amazon-owned Zoox is also testing its autonomous vehicles, which do not feature steering wheels, in several U.S. cities including San Francisco.
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